A building owner is evaluating the following alternatives for leasing space in an office building for the next three years:

a. Net lease with steps. Rent will be $18 per square foot the first year and increase by $1 the second year and $2 the third year. All operating expenses will be paid by the tenant.

b. Net lease with CPI adjustment. Rent will be $19 per square foot the first year and increase by 100% change in the CPI each year thereafter. The CPI is expected to increase by 4% next year and 5% the following year. All operating expenses will be paid by the tenant.

c. Gross Lease. Rent will be $25 per square foot each year with the lessor responsible for payment of all of the operating expenses. Expenses are estimated to be $8 during the first year and increase by $1.50 per year thereafter.

d. Gross Lease with Steps and Expense Stop. Rent will be $24 per square foot the first year and increase by $1 the second year and $2 the third year. The expense stop is set at $8, and expenses will increase as outlined above.

Calculate the effective rent to the owner for each lease option using an 8% discount rate.